reduction of capital

reduction of capital
a company's capital may be lawfully reduced in two ways:
(1) by extinguishing or reducing the liability of its members on any uncalled capital; or
(2) by repaying to them the nominal value of their shares.
Where a company has suffered losses, it can cancel paid-up shares on the ground that they are unrepresented by available assets. A reduction requires a special resolution; it must be authorised by the articles and confirmed by the courts.

Collins dictionary of law. . 2001.

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